Energy Portfolios – Investing for the Future

by L J Furman, MBA on September 20, 2013

in Connecting the Dots, Sustainable Investing, Value Investing

As of the close of trading Friday, Sept. 20, 2013, the trend, clearly evident by February 9, 2012 continues.

  • The Dow Jones Industrial Average is up 14.66% from 12/21/12.
  • The S&P 500 is up 16.36%.
  • The Fossil Fuel Portfolio, significantly underperforming the reference indices, is up 5.95%.
  • The Popular Logistics Sustainable Energy portfolio is up 110.10%.

PopLog.Port.13.09The important question is:  Is this a trend or a bubble?

I think it’s a trend. While I want to think it’s a trend, utility scale solar is at or below $4.00 per watt and getting cheaper.  Solar also scales from the 10 watts on a backpack to 10,000 watts or 10 KW on a rooftop to 500 million watts, 500 MW utilities are building. Wind is less expensive. Wind and solar are predictable.

For more details, consider the market capitalization of the companies in these portfolios, tables 6 and 7 . The fossil fuel industry is a “mature” industry, albeit one with problems.   The eight companies in the portfolio are worth $1.1 Trillion.  While Peabody Coal is worth $4.9 Billion, the other companies are big, and the barriers to entry are also tremendous.  Exxon, which constitutes 35.45% of the portfolio, is worth $390 Billion. Conoco Philips, the smallest oil company is worth $86.8 Billion.

The sustainable energy companies, on the other hand, range from Lighting Sciences, worth $83.2 Million to Next Era Energy, worth $34.4 Billion. These companies, in total, are worth $55.7 Billion and more than half, 61.8% is in one company. The companies in the Sustainable Portfolio are worth 4.8% of the value of the companies in the Fossil Fuel Portfolio. They are a disruptive technology – or they are a rounding error.

The companies in the Sustainable Energy can fail – Lighting Sciences makes beautiful lamps – I have some – but it has dropped roughly 50% in the last 9 months. But they just as easily represent disruptive technology.  An experiment like this could have been done comparing the value of transAtlantic ocean liners and airplanes 60 years ago.

The data are summarized beginning in Table 1, below.

Summary Data
Portfolio 12/21/12 09/20/13 Delta %
Sustainable Energy 8,000,000 16,807,890 8,807,890 110.10%
Fossil Fuel 8,000,000 8,475,865 475,865 5.95%
DJI 13,091 15,010 1,919 14.66%
S&P 500 1,430 1,664 234 16.36%
Table 1

The stock price data for the Sustainable Energy portfolio are in Table 2, below.

Sustainable Energy Portfolio – Stock Prices
Item Company Symbol 12/21/12 09/20/13 Delta Delta %
1 Cree CREE 34.0 60.2 26.19 77.03%
2 First Solar FSLR 31.0 39.0 8.02 25.87%
3 GT Adv. Tech. GTAT 3.0 8.2 5.22 174.00%
4 Lighting Science LSCG 0.8 0.4 -0.35 -46.67%
5 Next Era Energy NEE 70.0 80.7 10.69 15.27%
6 Sun Power SPWR 5.4 24.2 18.72 344.75%
7 Solazyme SZYM 8.3 10.6 2.29 27.46%
8 Vestas VWS 6.3 22.9 16.60 263.07%
Table 2

The stock price data for the Fossil Fuel Portfolio are in Table 3, below.

Fossil Fuel Portfolio – Stock Prices
Item Company Symbol 12/21/12 09/20/13 Delta Delta %
1 BP BP 42.1 42.5 0.34 0.81%
2 Chevron Texaco CVX 109.7 124.9 15.21 13.86%
3 Conoco Philips COP 58.6 71.0 12.40 21.16%
4 Exxon Mobil XOM 87.2 88.7 1.43 1.64%
5 Royal Dutch Shell RDS.A 69.3 66.0 -3.30 -4.76%
6 Haliburton HAL 34.7 49.3 14.63 42.15%
7 Transocean RIG 45.6 45.1 -0.58 -1.27%
8 Peabody Coal BTU 26.4 18.2 -8.19 -31.08%
Table 3

The valuation data for the Sustainable Energy Portfolio are in Table 4, below.

Sustainable Energy Portfolio – Valuation
Item Company Symbol Shares 12/21/12 09/20/13 Delta Delta %
1 Cree CREE 29.41 1,000 1,770 770 77.03%
2 First Solar FSLR 32.26 1,000 1,259 259 25.87%
3 GT Adv. Tech. GTAT 333.33 1,000 2,740 1,740 174.00%
4 Lighting Science LSCG 1,333.33 1,000 533 -467 -46.67%
5 Next Era Energy NEE 14.29 1,000 1,153 153 15.27%
6 Sun Power SPWR 184.16 1,000 4,448 3,448 344.75%
7 Solazyme SZYM 119.90 1,000 1,275 275 27.46%
8 Vestas VWS 158.48 1,000 3,631 2,631 263.07%
total 8,000 16,808 8,808 110.10%
Note that the number of shares and portfolio values are in thousands.
Table 4

The valuation data for the Fossil Fuel Portfolio are in Table 5, below.

Fossil Fuel Portfolio – Valuation
Value Delta
Item Company Symbol Shares 12/21/12 09/20/13 Amount Per Cent
1 BP BP 23.74 1,000 1,008 8 0.81%
2 Chevron Texaco CVX 9.11 1,000 1,139 139 13.86%
3 Conoco Philips COP 17.06 1,000 1,212 212 21.16%
4 Exxon Mobil XOM 11.46 1,000 1,016 16 1.64%
5 Royal Dutch Shell RDS.A 14.43 1,000 952 -48 -4.76%
6 Haliburton HAL 28.81 1,000 1,421 421 42.15%
7 Transocean RIG 21.91 1,000 987 -13 -1.27%
8 Peabody Coal BTU 38.46 1,000 698 -302 -30.15%
total 8,000 8,434 434 5.43%
Note that the number of shares and portfolio values are in thousands.
Table 5

The market capitalization data for the Sustainable Energy Portfolio are in Table 6.

Sustainable Energy Portfolio
Market Capitalization
Item Company Market Cap
1 Cree 7.2
2 First Solar 3.8
3 GT Adv. Tech. 1.0
4 Lighting Science 0.1
5 Next Era Energy 34.3
6 Sun Power 3.9
7 Solazyme 0.7
8 Vestas 4.7
total 55.68
Table 6

The market capitalization data for the Fossil Fuel Portfolio are in Table 7.

Fossil Fuel Portfolio
Market Capitalization
Item Company Market Cap
1 BP 133.8
2 Chevron Texaco 241.4
3 Conoco Philips 86.3
4 Exxon Mobil 390.3
5 Royal Dutch Shell 209.0
6 Haliburton 45.0
7 Transocean 16.2
8 Peabody Coal 4.9
total 1126.9
Table 7

Stay tuned.

Posts in this series

  1. L. Furman, 12/21/12, Popular Logistics Sustainable Energy Portfolio,
  2. L. Furman, 2/8/13, Nega-Watts, Nega-Fuel-Watts, Mega-Bucks,
  3. L. Furman, 2/9/13, Gold Bricks and Sink-Holes – The Risk & Reward of Fossil Fuel, Solar & Wind,
  4. L. Furman, 3/2/13, Sustainable Energy Portfolio UP 16% & Fossil Fuel Portfolio Up 1.7% – Since Dec.21, 2012..
  5. L. Furman, 3/23/13, Portfolio Simulation At 3 Months: Sustainable Energy: Up 22%. Fossil Fuels: 3%.
  6. L. Furman, 4/26/13, Earth Day, 2013. Oil Spills, Explosions, Fracking Business As Usual & The Stock Market Response
  7. L. Furman, 5/13/13, Popular Logistics Energy Portfolios: The Trend Continues.
  8. L. Furman, 6/24/13, Popular Logistics Energy Portfolios: At 6 months
  9. L. Furman, 7/22/13, Popular Logistics Energy Portfolios: Sustainable Energy Doubles. Fossil Fuels increase 5.4%
  10. L. Furman, 8/22/13, Popular Logistics Energy Portfolios: An Exercise in Climate Capitalism
  11. L. Furman, 9/20/13, Energy Portfolios – Investing for the Future

I, Larry Furman, an analyst with Popular Logistics, hold a BS and an MBA, am available for consulting in various domains and can be reached at “lfurman97” at G Mail.  My goal in these posts is to present and discuss phenomena which I find interesting and which appear indicative of systemic shifts in the economy. Investments in equities of various companies are risky.  I do NOT hold a “Series 6” or “Series 7” license from the SEC or any similar licensing body. I am NOT a licensed stock broker, investment adviser or financial adviser and this should n0t be considered “Financial Advice” or “Investment Advice.”

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